Fidelity earns $23,4m from stand sales

May 11, 2018 7:16 AM

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Diversified insurance group, Fidelity Life Assurance of Zimbabwe realised $23,4 million from sale of stands at its Southview Park project in the financial year 2017. According to the group’s financial results for the year to December 31, 2017, this was a 4 percent decline from prior year’s $24,2 million.

“Sales of stands for the Southview Park project were 4 percent lower at $23,4 million, against $24,2 million in the prior year,” said Fidelity chairman Fungai Ruwende.

Mr Ruwende further added that the group’s flagship, Fidelity Life Assurance continued to earn interest income on the outstanding amounts for stands sold on credit, which income, at $5,3 million in the year under review was 44 percent higher than that recorded in the prior year.

Earlier, Fidelity, which was realizing rich pickings from earlier property investments, said it expected to get cost savings from the use of offsite infrastructure developed at Southview Park.

In line with its quest to afford housing development at relatively reasonable rates, the financial services group also embarked on Langford housing project, a successor to the South View Park project developed at a cost in excess of $14 million.

The life assurance company acquired the 834 hectare land on Langford Farm under a $16 million land for debt swap deal with CFI Holdings.

Fidelity, which is eyeing a $200 million pay day from the project will develop 11 500 high density residential stands, inclusive of housing and other developments.

The project is anticipated to be profitable and capable of strengthening the insurance and property developer’s balance sheet, giving it capacity to underwrite more business.

Last year, the group indicated it would go ahead with plans for the Langford development albeit some shareholder wrangles at CFI Holdings where it was alleged the sale of the land in question was fraudulent and involved related parties.

Overall, Fidelity recorded a loss after tax of $1,3 million for the year to December 31. 2017, from $6,4 million profit in the prior year on various shareholder write offs and impairments.

Despite the challenging operating environment in the year, revenue for the full year under review rose 7 percent to $55,9 million compared to $52 million.

Gross insurance premiums fell 7 percent to $14,2 million compared to prior year’s $15,4 million while claims reduced by 41 percent to $4,9 million from $8,3 million in the prior year.

Fidelity Life Assurance, which is the group’s flagship, recorded a 17 percent decrease in premiums to $12,9 million on shrinkage of business by its clients who downsized operations and restricted uptake of assurance products.